Key Points
- Schroders has sold One Lyric Square, a major office headquarters in Hammersmith, West London, to French SCPI IROKO ZEN.
- The building spans 103,374 square feet of Class A office space and is fully let to The Office Group (TOG) with a WAULT of 12.9 years and no breaks.
- One Lyric Square was originally built in the 1970s and underwent a £32 million refurbishment in 2018 to become a modern workplace destination.
- Knight Frank advised the buyer on this transaction.
- This deal marks Knight Frank’s 10th deal with Iroko and IROKO ZEN’s fourth London acquisition since 2024.
- The transaction reflects strong international investor interest in London commercial property offering secure long-term income.
- Richard Stewart, Partner, Capital Markets, Knight Frank Europe, highlighted London’s continued investment appeal due to its fundamentals and demand.
What is the significance of Schroders selling One Lyric Square in West London?
Schroders has sold One Lyric Square, a prominent office HQ located in the heart of fulham/hammersmith/">Hammersmith, West London, to the French SCPI IROKO ZEN, according to Andrea Zander of irei.com. This property is a virtual freehold asset comprising 103,374 square feet of Grade A office space fully let to The Office Group (TOG). The property offers a Weighted Average Unexpired Lease Term (WAULT) of 12.9 years with no breaks, which secures long-term income for the new owner.
One Lyric Square is a significant commercial asset originally developed in the 1970s. It underwent a comprehensive £32 million refurbishment in 2018, which transformed the site into a modern, high-quality workplace destination, making it attractive to tenants and investors alike.
Who advised on the transaction and what does this signify for international investors?
Knight Frank advised the buyer, IROKO ZEN, on the acquisition of One Lyric Square. This deal represents Knight Frank’s 10th transaction with IROKO and IROKO ZEN’s fourth London acquisition since 2024, underscoring the continued appetite from international investors for London office assets providing stable, long-term income streams.
Richard Stewart, Partner at Knight Frank Europe, commented that
“London continues to demonstrate its strong fundamentals and active tenant demand, attracting international capital seeking secure long-term income.”
This transaction is emblematic of continued investor confidence in London’s office market despite broader global economic uncertainties.
How does this sale fit into Schroders’ broader property strategy?
While the recent sale marks the disposal of a major West London office asset for Schroders, it aligns with a broader trend identified by Professional Pensions where Schroder Property’s Gresham Real Estate Fund II has disposed of multiple London office investments totalling £90.3 million recently.
Furthermore, Schroders’ real estate arm continues to actively manage and expand portfolios in key UK regional cities, as highlighted by their acquisition of a regional office portfolio including assets in Chiswick, St Albans, and Glasgow, reflecting a strategy that balances regional office holdings alongside London. Tom Newman, Investment Manager at Schroder Real Estate, emphasized the importance of securing well-let office buildings in strong locations with good tenant covenants, showing the firm’s evolving focus.
What are the features and tenant profile of One Lyric Square?
One Lyric Square provides 103,374 sq ft of high-grade office space fully leased to The Office Group (TOG), a well-known provider of flexible office space solutions. The property benefits from a very long lease term (WAULT 12.9 years) with no tenant break options, ensuring income stability.
The refurbishment completed in 2018 was valued at £32 million, modernising the building’s facilities and infrastructure to meet current market demands for high-quality office environments in London. This type of modernisation is a key factor in attracting premium tenants and maintaining asset value in a competitive market.
What does this sale reveal about the London commercial property market?
This transaction exemplifies the persistent interest from overseas investors, particularly European ones like IROKO ZEN, in acquiring prime London office assets with secure income profiles. The appetite for long-dated, well-located office buildings signals confidence in the fundamentals of London’s commercial real estate market.
Knight Frank’s involvement and recent multiple deals with IROKO highlight the sustained momentum of capital inflows despite ongoing market challenges. According to Richard Stewart, London’s strong market dynamics continue to appeal due to its position as a global business hub combined with limited supply of high-quality office space.
What other recent movements have Schroders made in London real estate?
Schroders’ Gresham Real Estate Fund II’s recent disposal of four London office investments worth £90.3 million further illustrates the company’s active management and rebalancing of its London portfolio to optimise returns and reposition for market opportunities.
Additionally, Schroders continues to maintain its presence across the UK with other acquisitions and holdings in regional offices, reflecting a strategic shift towards diversified geographic exposure and asset mix within their real estate investments.
Schroders’ sale of One Lyric Square in West London to IROKO ZEN marks a significant transaction highlighting the resilience and attractiveness of London’s prime office market to international investors. The long lease with The Office Group and recent comprehensive refurbishment underpin the asset’s appeal, while the sale fits within Schroders’ active portfolio management strategy in British real estate. Knight Frank’s role and repeated dealings with IROKO ZEN further demonstrate the international confidence in London as a secure, long-term investment destination.
